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The Impact of COVID-19 on the U.S. Child Care Market: Evidence from Stay-At-Home Orders

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  • Ali, Umair

    (Center for Evaluation and Development (C4ED))

  • Herbst, Chris M.

    (Arizona State University)

  • Makridis, Christos A.

    (Arizona State University)

Abstract

Stay-at-home orders (SAHOs) have been implemented in most U.S. states to mitigate the spread of COVID-19. This paper quantifies the short-run impact of these containment policies on the supply of and demand for child care. The child care market may be particularly vulnerable to a SAHO-type policy shock, given that many providers are liquidity-constrained. Using plausibly exogenous variation from the staggered adoption of SAHOs across states, we find that online job postings for early care and education teachers declined by 13% after enactment. This effect is driven exclusively by private-sector services. Indeed, hiring by public programs like Head Start and pre-kindergarten has not been influenced by SAHOs. In addition, we find little evidence that child care search behavior among households has been altered. Because forced supply-side changes appear to be at play, our results suggest that households may not be well-equipped to insure against the rapid transition to the production of child care. We discuss the implications of these results for child development and parental employment decisions.

Suggested Citation

  • Ali, Umair & Herbst, Chris M. & Makridis, Christos A., 2020. "The Impact of COVID-19 on the U.S. Child Care Market: Evidence from Stay-At-Home Orders," IZA Discussion Papers 13261, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13261
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    References listed on IDEAS

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    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Schools

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    Cited by:

    1. Chris M. Herbst, 2023. "Child Care In The United States: Markets, Policy, And Evidence," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 255-304, January.
    2. Ali, Umair & Herbst, Chris M. & Makridis, Christos A., 2021. "Minimum Quality Regulations and the Demand for Child Care Labor," IZA Discussion Papers 14684, Institute of Labor Economics (IZA).
    3. Harbatkin, Erica & Strunk, Katharine O. & McIlwain, Aliyah, 2023. "School turnaround in a pandemic: An examination of the outsized implications of COVID-19 on low-performing turnaround schools, districts, and their communities," Economics of Education Review, Elsevier, vol. 97(C).
    4. Beland, Louis-Philippe & Brodeur, Abel & Haddad, Joanne & Mikola, Derek, 2020. "Covid-19, Family Stress and Domestic Violence: Remote Work, Isolation and Bargaining Power," GLO Discussion Paper Series 571, Global Labor Organization (GLO).
    5. Makridis, Christos A. & Wang, Tao, 2024. "Learning from Friends in a Pandemic: Social networks and the macroeconomic response of consumption," European Economic Review, Elsevier, vol. 169(C).
    6. Louis-Philippe Béladn & Abel Brodeur & Joanne Haddad & Derek Mikola, 2021. "Determinants of Family Stress and Domestic Violence: Lessons from the COVID-19 Outbreak," Canadian Public Policy, University of Toronto Press, vol. 47(3), pages 439-459, September.
    7. Brown, Jessica H. & Herbst, Chris M., 2021. "Child Care over the Business Cycle," IZA Discussion Papers 14048, Institute of Labor Economics (IZA).
    8. Ali, Umair & Brown, Jessica H. & Herbst, Chris M., 2024. "Secure communities as immigration enforcement: How secure is the child care market?," Journal of Public Economics, Elsevier, vol. 233(C).
    9. Francisco Corona & Graciela Gonz'alez-Far'ias & Jes'us L'opez-P'erez, 2021. "A nowcasting approach to generate timely estimates of Mexican economic activity: An application to the period of COVID-19," Papers 2101.10383, arXiv.org.
    10. Hooper, Alison & Schweiker, Claire, 2024. "Family child care educators’ experiences and decision-making related to serving children during COVID-19 and implications for supporting educators after the pandemic," Children and Youth Services Review, Elsevier, vol. 161(C).
    11. Matias Busso & Maria P. Gonzalez & Carlos Scartascini, 2022. "On the demand for telemedicine: Evidence from the COVID‐19 pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1491-1505, July.
    12. Herbst, Chris M., 2022. "Child Care in the United States: Markets, Policy, and Evidence," IZA Discussion Papers 15547, Institute of Labor Economics (IZA).
    13. Gu, Ran & Zhong, Ling, 2023. "Effects of stay-at-home orders on skill requirements in vacancy postings," Labour Economics, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    early care and education; COVID-19; coronavirus; child care; stay-at-home orders;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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